Retirement Lessons From Parents

7:40 am ESTJul 22, 2015

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The lessons our parents teach us early on in life can last well into retirement.

To get a sense of some of these parental tips and hints for managing later in life, we asked The Experts, a group of retirement researchers, academics and retirees themselves, about the most significant thing they remember learning about retirement issues from their parents.

Their answers are below. The discussion relates to a recent Wall Street Journal Encore report and formed the basis of a discussion on The Experts blog earlier this year.

My Parents as Role Models for Retirement Planning

DAVID BLANCHETT:I recently asked my parents, who are both retired, what retirement advice they would share with others, and I think what they said was spot-on.

They started saving for retirement and college in their 30s, after my twin brother and I were born. They didn’t really have to work with a financial planner because they are both relatively quantitative. My mother, Susan, was a high-school math teacher and my father, Bob, was a middle-school science teacher. My mother did future-value calculations (this was before there were things like the Internet or computer programs available to make the calculations for you) to determine how much savings they would need to supplement their defined-benefit pension earnings in retirement.

Not everyone needs to be this precise in their projections, although it helps. More important is taking this first step of being prepared, which is just to think over where your retirement income will come from and whether it will be enough. It’s wise to be conservative here—overestimate your needs, underestimate the reliability of markets to help you reach your goals and don’t forget about the impact of inflation. Once you have a picture of your income needs in retirement, then you can develop a savings and investment plan.

Professional financial planners can help a lot, even if it means just meeting with someone to tell you that you’re on the right track. But they can also help you face what might be a tough reality—if you’re past your 30s and haven’t begun saving for retirement, you might need to make some significant sacrifices now to fund your retirement. And if you’re younger than 30, it might help to have an objective voice of wisdom when evaluating the trade-offs between retirement saving (which is smart but not fun) and more alluring spending choices, such as vacations, cars or other splurges. If not a professional financial planner, at least talk these decisions over with your parents!

David Blanchett is the head of retirement research for Morningstar Investment Management.

What My Father’s Death Taught Me About Long-Term Care

KAREN LINCOLN: It’s not the load that breaks you down, it’s the way you carry it. This saying suggests that good decision-making and careful planning can help you deal with some of life’s challenges.

I’d like to think that I make good decisions and engage in careful planning. I consider my options, gather evidence, weigh the pros and cons, and make a decision followed by a plan. However, I didn’t take this approach when planning for retirement until a few years ago.

My father was a hardworking man, employed in as many as three jobs at once to support his family. He survived childhood physical abuse, a segregated Army and challenges associated with being an African-American man from Texas with a high-school diploma. By all accounts he was fairly successful for most of his life. He owned a home, was gainfully employed, provided for his family and had an active social life.

And then he got sick. My father had diabetes that resulted in an amputated leg and vision impairment, congestive heart failure, stroke, end-stage renal disease requiring dialysis once a day, and depression. He suffered physical and financial abuse from his caregiver and neglect in a low-quality nursing home, where he eventually died after a short stay. Despite his condition, we were told that he could have been cared for at home.

My father’s life taught me to work hard and to be self-sufficient. My father’s death taught me to have a long-term-care plan.

In my own work I encourage seniors and their families to have a long-term-care plan. This plan includes identifying resources in their communities that will allow them to “age in place” and avoid institutionalized care. Do you know the location of your local senior center or the types of services and programs it offers? Are in-home supportive services available in your community? Is there an assisted-living residence in your neighborhood? If you live in an urban or low-income neighborhood, chances are there isn’t one. What is your alternative? Regardless of your economic status, it is important to decide who will take care of you when you are no longer able to care for yourself.

Long-term-care costs can completely annihilate even the most careful investment plan. However, 65% of Americans 40 years or older report doing “only a little” planning for their long-term-care needs or “none at all.”

It may be impossible to avoid all of life’s challenges. But sound decisions and careful planning can help you carry the load.

Karen D. Lincoln is an associate professor in the USC School of Social Work, director of the USC Hartford Center of Excellence in Geriatric Social Work, and senior scientist at the USC Edward R. Roybal Institute on Aging at the University of Southern California. She is also founder and chair of Advocates for African American Elders.

The Retirement Secret I Learned From My Parents

JONATHAN GUYTON:Like nearly all important lessons, the most important thing I’ve gleaned about retirement from my parents and grandparents came from watching what they did.

My maternal grandparents had some good genes. They both lived until they were 90, and though my grandfather was slowed by Parkinson’s in his last decade, my grandmother lived independently until her final months. Fortunately, they passed on these genes to their only daughter. My mother soon turns 90 and still stirs things up with the school administrators of today who worked for her when she ran the school. And my father, who continually bucks his family’s health history, recently passed that landmark age himself with incredible mental and physical agility, still playing golf–carrying his own full set of clubs–or working in the yard most every day that it’s above 60 degrees.

My observation: Both couples, with their robust and active lives, lived at a pace they each established well over a half-century ago (My parents still drive over 1,000 miles to Florida for six weeks each winter!), and showed almost no signs of slowing until at least their late 80s.

The lesson? It now seems obvious: Retirees don’t want to slow down. They merely want to change some of their activities while living life at their normal pace for as long as possible. Good health begets an active, involved life, and such a life fosters continuing good health. And so it can go (and go and go) until something intervenes. For those blessed with good health, who also practice good health habits, this can mean an active life for a very long time. Honing one’s curiosity and engaging one’s passions with learning and involvement can further enhance this.

My professional hat would have me say that this isn’t just a lengthy quantity of retirement years. It’s the active quality in many, if not most, of those retirement years. And there are financial characteristics required of one’s retirement income strategy that are necessary to support this “active longevity.”

For starters, it must provide income sustainability for perhaps 40 years, especially a couple with a younger female. The couple must have the resources to fund their frequent discretionary expenses, which actually are quite necessary for a healthy and active retirement loop and that tend to rise with inflation over the years. And their strategy must be flexible enough to accommodate the numerous spontaneous opportunities that arise–like my parents’ delaying their March northbound return home by a week to take a Caribbean cruise–while clearly demarkingwhen their core income would become at risk.

Thanks for the valuable lesson, Mom and Dad. I hope to follow in your footsteps!